PORAM GUIDE PORAM GUIDE TO CONDUCT BUSINESS WITH TO CONDUCT BUSINESS WITH TO CONDUCT BUSINESS WITH TO CONDUCT BUSINESS WITH

MALAYSIAN EXPORTERSMALAYSIAN EXPORTERS

MALAYSIA MALAYSIA –– PHILIPPINES PALM OIL TRADE FAIR & SEMINAR 2012PHILIPPINES PALM OIL TRADE FAIR & SEMINAR 20121616THTH APRIL 2012APRIL 2012

DUSIT THANI HOTEL, MANILADUSIT THANI HOTEL, MANILA

OUTLINE OF PRESENTATIONOUTLINE OF PRESENTATION

•• WHO WE ARE ?WHO WE ARE ?•• WHY WE ARE IMPORTANT TO YOU?WHY WE ARE IMPORTANT TO YOU?•• WHAT WE CAN DO FOR YOU ?WHAT WE CAN DO FOR YOU ?

INDUSTRY ORGANIZATIONS INDUSTRY ORGANIZATIONS IN IN THE MALAYSIAN PALM OIL THE MALAYSIAN PALM OIL

INDUSTRYINDUSTRY

ll Malaysian Palm Oil Association (MPOA)Malaysian Palm Oil Association (MPOA)

ll Palm Oil Millers’ Association (POMA)Palm Oil Millers’ Association (POMA)

ll Palm Oil Refiners Association Of Malaysia Palm Oil Refiners Association Of Malaysia ll Palm Oil Refiners Association Of Malaysia Palm Oil Refiners Association Of Malaysia (PORAM)(PORAM)

ll Malayan Edible Oil Manufacturers’ Malayan Edible Oil Manufacturers’ Association (MEOMA)Association (MEOMA)

ll Malaysian Malaysian OleochemicalOleochemical Manufacturers’ Manufacturers’ Group (MOMG)Group (MOMG)

The Palm The Palm Oil Refiners Association of MalaysiaOil Refiners Association of Malaysia

§ The Palm Oil Refiners Association of Malaysia,more widely known as PORAM, was formed in1975.1975.

§ PORAM is a voluntarily-joined, non-profitorganization and non-governmental organization(NGO)

§ Objective is to collectively support and advancethe status and interest of the palm oil refiningand/or processing industry

PORAMPORAMORGANISATION STRUCTUREORGANISATION STRUCTURE

Management Board

4Committees

Secretariat(9 Staffs)Committees

Commercial & Technical Committee

Associate Members Committee

Price Settlement Committee

Arbitration Rules Execution Committee

(9 Staffs)

PORAM MEMBERSHIPPORAM MEMBERSHIP

3 3 CATEGORIESCATEGORIES

• Firm/company in the business ofprocessing palm oil.Full MemberFull Member

• Firm/company connected with oils/fatstrade but not directly in processing,refining and fractionating of palm oil.

Associate Associate MemberMember

• Firm/company who is in the business ofprocessing and is an associatecompany/subsidiary of any Full Member.

Supplementary Member

OUTLINE OF PRESENTATIONOUTLINE OF PRESENTATION

•• WHO WE ARE ?WHO WE ARE ?•• WHY WE ARE IMPORTANT TO YOU?WHY WE ARE IMPORTANT TO YOU?•• WHAT WE CAN DO FOR YOU ?WHAT WE CAN DO FOR YOU ?

Information Information Information Information DisseminationDisseminationDisseminationDissemination1

ROLES AND FUNCTIONSROLES AND FUNCTIONS

SERVICES TO MEMBERSSERVICES TO MEMBERS

Trade FacilitationTrade FacilitationTrade FacilitationTrade Facilitation4

Government Government Government Government Interaction/ Interaction/ Interaction/ Interaction/ RepresentationRepresentationRepresentationRepresentation

Training / Training / Training / Training / CoursesCoursesCoursesCourses

2

3

Trade/Export Trade/Export Trade/Export Trade/Export PromotionPromotionPromotionPromotion

Trade Dispute Trade Dispute Trade Dispute Trade Dispute ResolutionResolutionResolutionResolution

5

6

Plantation Houses +

Small Holders Independent

Estates

Fresh

Oil Mills

Crude Palm Oil (CPO) +

(Palm

Domestic Commodity Brokers

Domestic Refiners

Processed

Domestic Commodity Brokers

International Dealers

State Trading House

Importing Refiners

END

MARKETING CHAIN OF MALAYSIAN PALM OIL

Fresh Fruit

Bunches (FFB)

(Palm Kernels)

Domestic Dealers

Processed Palm Oil (PPO)

Selling Agents

Oils & Fats

Processors

USERS

Direct Sales

Palm oil trading specifications and standard contracts developed by PORAM have been instrumental to promote healthy trade and market practices

MALAYSIAN POMALAYSIAN PO AND PKO PRODUCTSAND PKO PRODUCTSEXPORT FROM 2007 TO 2011 (EXPORT FROM 2007 TO 2011 (MIL. MT)MIL. MT)

2007 2008 2009 2010 2011CRUDE PALM OIL 1.93 2.33 2.53 2.73 3.47

RBD PALM 0IL 1.33 1.76 2.13 1.81 1.55RBD P OLEIN 7.11 7.60 7.48 8.21 9.00

RBD P STEARIN 1.44 1.50 1.58 1.73 1.78RBD P STEARIN 1.44 1.50 1.58 1.73 1.78

COOKING OIL 0.60 0.69 0.90 0.87 0.78PFAD 0.51 0.65 0.57 0.54 0.64

CRUDE PKO 0.18 0.15 0.18 0.18 0.20RBD PKO 0.33 0.33 0.34 0.34 0.36

RBD PK STEARIN 0.08 0.09 0.09 0.14 0.13RBD PK OLEIN 0.11 0.13 0.13 0.15 0.13

Note: Source: MPOB RBD - Refined Bleached and DeodorizedPFAD - Palm Fatty Acid DistillatePKO - Palm Kernel OilPK - Palm KernelP - Palm

MALAYSIAN POMALAYSIAN PO & PKO& PKO PRODUCTION PRODUCTION & EXPORT (MT) FROM 1975 TO 2010& EXPORT (MT) FROM 1975 TO 2010

PALM OIL PALM KERNEL OILPRODUCTION EXPORT PRODUCTION EXPORT

1975 1,257,573 93% 108,260 100%1980 2,573,173 88% 222,285 98%1980 2,573,173 88% 222,285 98%1985 4,134,463 83% 511,908 52%1990 6,094,622 94% 827,233 83%1995 7,810,546 83% 1,036,538 37%2000 10,842,095 83% 1,384,685 37%2005 14,961,654 90% 1,842,628 46%2010 16,993,717 98% 2,014,942 57%

Note: * 5 Year Incremental Increase 2011Source: MPOB PO Production 18.91 mil. Export 95%

PKO Production 2.14 mil. Export 54%

IMPORT IMPORT OF PALM OIL TO SELECTED OF PALM OIL TO SELECTED MAJOR MAJOR DESTINATIONS (MILLION DESTINATIONS (MILLION MT) MT)

FROM 2005 FROM 2005 -- 201020102005 2006 2007 2008 2009 2010

CHINA PR 4.32 5.46 5.49 5.59 6.55 5.80FROM M’SIA 2.90 3.45 3.72 3.64 3.96 3.45%Mkt Share 67.1 63.1 67.7 65.1 60.4 59.4EU 27 4.47 4.59 4.64 5.28 5.85 5.85FROM M’SIA 2.29 2.59 2.07 2.05 1.89 2.06

Note:RBD – Refined Bleached and DeodorizedPFAD – Palm Fatty Acid DistillatePPO – Processed Palm Oil

Source: MPOB 2011

FROM M’SIA 2.29 2.59 2.07 2.05 1.89 2.06%Mkt Share 51.2 56.4 44.6 38.8 32.3 35.2PAKISTAN 1.64 1.76 1.73 1.84 1.92 2.01FROM M’SIA 0.96 0.96 0.97 1.19 1.63 1.85%Mkt Share 58.5 54.5 56.0 64.6 84.8 92.0INDIA 3.31 3.19 3.68 5.75 6.82 6.64FROM M’SIA 0.66 0.51 0.50 0.98 1.54 1.18%Mkt Share 19.9 15.9 13.5 17.0 22.5 17.7PHILLIPINES 0.20 0.19 0.18 0.18 0.15 0.20FROM M’SIA 0.17 0.14 0.13 0.15 0.13 0.18% Mkt Share 85.0 73.6 72.2 83.3 86.6 90.0

MALAYSIAN EXPORTMALAYSIAN EXPORT OF PALM OIL OF PALM OIL PRODUCTS TO PRODUCTS TO THE PHILIPPINESTHE PHILIPPINESFROM 2007 TO 2011 (IN TONNES)FROM 2007 TO 2011 (IN TONNES)

2007 2008 2009 2010 2011PALM OIL 128,062 161,453 119,255 204,731 512,218*

PALM KERNEL 0IL 8,111 11,983 30,814 4,878 14,180PK CAKE 23,686 29,852 26,343 0 1,700

OLEOCHEMICALS 51,060 48,060 46,183 53,960 64,101OLEOCHEMICALS 51,060 48,060 46,183 53,960 64,101

FINISHED PROD. 4,264 7,967 10,850 8,183 9,051OTHERS 22 0 0 0 0TOTAL 215,205 259,315 233,445 271,752 601,250

Note: Source: MPOB PK - Palm KernelFinished Products includes shortening & soap In 2011, there was a 120% increment of import over 2010Oleochemicals include soap noodles A total of 459,372 tonnes of RBD Olein was importedPalm Oil mainly RBD Olein This represent about 90% of palm oil import into The Philippines

OUTLINE OF PRESENTATIONOUTLINE OF PRESENTATIONOUTLINE OF PRESENTATIONOUTLINE OF PRESENTATION

•• WHO WE ARE ?WHO WE ARE ?•• WHY WE ARE IMPORTANT TO YOU?WHY WE ARE IMPORTANT TO YOU?•• WHAT WE CAN DO FOR YOU ?WHAT WE CAN DO FOR YOU ?

•• WHO WE ARE ?WHO WE ARE ?•• WHY WE ARE IMPORTANT TO YOU?WHY WE ARE IMPORTANT TO YOU?•• WHAT WE CAN DO FOR YOU ?WHAT WE CAN DO FOR YOU ?

TRADE FACILITATIONTRADE FACILITATIONTRADE FACILITATIONTRADE FACILITATION4

SERVICES TO MEMBERSSERVICES TO MEMBERS

Issue Trading Contracts and Joint Contracts

Formulation of international specifications for palm products

Publish handbooks & other documents to facilitate trade

b

a

c

TYPE OF PORAM CONTRACTS

A. Short Form Contract

B. Contract No. 1 - Domestic Contract for Malaysian Crude Unbleached Palm Oil in Bulk

C. Contract No. 2 - FOB Contract for Processed Palm Oil and Palm Kernel Oil Products in Bulk

D. Contract No. 3 - Domestic Contract for Malaysian Processed Palm Oil in Bulk (For Delivery/ Collection within Malaysia including Singapore)

E. Contract No. 4 - FOB Contract for Processed Palm Oil Products in Drums

F. Contract No. 5 - CIF Contract for Processed Palm Oil Products in Drums

TYPE OF PORAM CONTRACTS

G. Contract No. 6 - Domestic Sales Contract for Malaysian Crude Unbleached Palm Oil in Bulk CIF Delivered Weights for Sales between East and Peninsular Malaysia

H. Contract No. 7 - Joint FOB Contract for Crude Palm Oil

I. FOSFA 81 - Contract for Palm Oil Products in Bulk (CIF) Issued Jointly by FOSFA International/PORAM/MEOMA

Joint FOB Contract for Crude Palm Oil and Crude Palm Kernel Oil in Bulk Issued by The Palm Oil Refiners Association of Malaysia, Malayan Edible Oil Manufacturers’ Association and Malaysian Palm Oil Association

NEW PORAM CONTRACTS (JULY 2012)

J. Contract No. 8 - FOB Contract for Processed Palm Oil in Packed Form Issued by The Palm Oil Refiners Association of Malaysia

K. Contract No. 9 - CIF Contract for Processed Palm oil in Packed Form Issued by The Palm Oil Packed Form Issued by The Palm Oil Refiners Association of Malaysia

PORAM STANDARD SPECIFICATIONS FOR PORAM STANDARD SPECIFICATIONS FOR PROCESSED PALM OIL PRODUCTSPROCESSED PALM OIL PRODUCTS

§§ Neutralised palm oil/palm olein/stearinNeutralised palm oil/palm olein/stearin§§ Neutralised & bleached palm oil/palm Neutralised & bleached palm oil/palm olein/palm stearinolein/palm stearin

§§ Refined, bleached & deodorised palm Refined, bleached & deodorised palm §§ Refined, bleached & deodorised palm Refined, bleached & deodorised palm oil/palm olein/palm stearinoil/palm olein/palm stearin

§§ Neutralised, bleached & deodorised palm Neutralised, bleached & deodorised palm oil/palm olein/palm stearin oil/palm olein/palm stearin

§§ Crude palm olein/crude palm stearin Crude palm olein/crude palm stearin §§ Palm acid Palm acid oil (PAO)oil (PAO)§§ Palm fatty acid Palm fatty acid distillate (PFAD)distillate (PFAD)

PORAM DIRECTORYPORAM DIRECTORY

PORAM DIRECTORY

PORAM DIRECTORY

PORAM DIRECTORY

PORAM DIRECTORY

PORAM DIRECTORY

PORAM DIRECTORY

ASSOCIATE MEMBERS ASSOCIATE MEMBERS -- 8282

CategoryCategoryCategoryCategory LocalLocalLocalLocal OverseasOverseasOverseasOverseas TotalTotalTotalTotal

Brokers 6 4 10

Bulking 2 - 2

Shipowners/Shipbrokers

4 6 10

Surveyors/Analysts

10 - 10

Trading / Dealers

8 11 19

Others 16 15 30

TOTAL 46 36 82

PORAM DIRECTORY

PORAM DIRECTORY

PORAM DIRECTORY

PORAM WEBSITE : PORAM WEBSITE : www.poram.org.my

UPCOMING PORAM EVENTS

MARAMING SALAMAT POMARAMING SALAMAT POMARAMING SALAMAT POMARAMING SALAMAT PO

THANKTHANK YOU VERY MUCHYOU VERY MUCH

For Further EnquiriesFor Further Enquiries

The Palm Oil Refiners Association The Palm Oil Refiners Association of Malaysia (PORAM)of Malaysia (PORAM)

801C/ 802A, Block B801C/ 802A, Block B801C/ 802A, Block B801C/ 802A, Block BExecutive Suites, Executive Suites, KelanaKelana Business CentreBusiness Centre

97 97 JalanJalan SS7/2SS7/247301 47301 KelanaKelana JayaJayaSelangor, MalaysiaSelangor, Malaysia

Tel. No : +603Tel. No : +603--7492 00067492 0006Fax No : +603Fax No : +603--7492 01287492 0128

EE--mail : mail : poram@poram.org.myporam@poram.org.myWebsite : Website : www.poram.org.mywww.poram.org.my